Business

Newtownabbey cinema complex to go ahead as developer reports £266m loss

Hammerson has said it remains committed to developing a new cinema complex in Newtownabbey. Pictured is a computer-generated image of the development
Gareth McKeown and PA

PROPERTY giant, Hammerson has said it remains committed to the creation of a new cinema complex in Newtownabbey, despite reporting an annual loss of over £250 million last year.

The shopping centre owner, whose UK portfolio includes Abbey Retail Park, unveiled its full-year results yesterday, showing a loss before tax of £266.7 million, an almost £700m swing from the £413m profit recorded in 2017.

Net rental income declined 6.2 per cent to £347.5m.

The group, which sold off £570m worth of its assets last year, has also confirmed it plans dispose of a similar amount in 2019, which may include the Newtownabbey park.

Hammerson has set up an investment and disposal committee as it ramps up its focus on slimming down the portfolio and is currently in talks over possible sales worth up to £900m.

In July last year Hammerson confirmed it would be disposing of its retail parks portfolio over the 'medium term', including the Newtownabbey site. The latest round of portfolio sales is understood to include selected retail parks, but the company has not confirmed the names of those to be offloaded this year.

The European property group, which also owns Kildare Village and Dublin's Dundrum Town Centre, is behind a new multi-screen cinema complex at Abbey Retail Park on the Old Church Road.

Hammerson has said that despite its exit from the retail parks sector it will continue to progress with the plans, approved by Antrim and Newtownabbey Borough Council last week.

Work on the development, which features a multi-screen cinema as well as café/restaurant units is set to begin this year, with further information on the delivery of the project expected in the near future.

Hammerson chief executive, David Atkins described 2018 as a "tough year", particularly in the UK, with net rental income dropping by 1.3 per cent at its UK flagship destinations and by 4.3 per cent at retail parks due to tenant failures and CVAs.

The value of the company's portfolio also fell over the year by almost 6 per cent to £9.94bn, while the firm expects further weakness in the UK market until the outcome of Brexit is determined.

"Tenant failures, the structural shift in retail and a more considered consumer created a difficult operating environment, putting pressure on property values," Mr Atkins said.

Activist investor Elliott, which upped its stake in Hammerson to 5 per cent in July has welcomed the potential reshaping of the group's extensive portfolio.

"This increased focus on strategic disposals, as marked by updated targets for 2019 and a current pipeline of potential sales of over £900m, signals a positive development in the company's progress, and its ability to ensure that its portfolio of high-quality assets delivers compelling value for all shareholders," Elliott said in a statement.

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